As part of the on-going power sector reform program which commenced in 2005 following the enactment of the electric power sector reform act of 2005, the Federal Government of Nigeria (“FGN”) through the Niger Delta Power Holding Company Limited (“NDPHC”) and the National Council on Privatisation (“NCP”) approved the privatisation of 10 National Integrated Power Projects (“NIPP”) or (“NDPHC Generation Companies”) through the sale of 80% majority stake in each power plant.
Following a competitive pre-qualification process, ENL Consortium Ltd was invited alongside other consortia to submit technical and commercial bids for the acquisition of an 80% equity stake in Olorunsogo Generation Company Limited (“OGCL”). The “OGCL” is the owner of the 754MW combined cycle gas turbine plant with four gas turbines (GE Frame 9E Gas Turbines) and two steam turbines (GE Steam Turbines) located in Olorunsogo, Ogun State, Nigeria (the “Share Acquisition” / “Project”).
ENL emerged as the Preferred Bidder, having submitted a technical bid that surpassed the evaluation threshold and the most competitive commercial bid with a price of US$751.240 Million (the “Bid Price”). In accordance with the earlier guidelines for the FGN privatization process, ENL was required to issue a Bank Guarantee in favour of Bureau of Public Enterprises for 15% of the Bid Price. ENL has posted this bid bond thrice. Thereafter, ENL shall be required to make an initial deposit of 25% of the Bid Price within 15 days of executing the Share Sale Agreement with the balance of 75% of Acquisition Amount due within [6months] of executing the Share Sale Agreement.
However, because the precedent conditions in the power sector at the time made the transaction unbankable, ENL, alongside other Preferred Bidders, could not execute the Share Sale Agreement.
At present, the Federal Government, after joint negotiations, has met most of the demands of the Preferred Bidders. This has made ENL to pursue the transaction closure of the acquisition of this Power Plant.
